Five tips to avoid permanent residence pitfalls

by External02 Jul 2014
Employer Sponsored Permanent Residence is attractive for many employees and employers, yet it can be a costly exercise for both if they get it wrong. As there are different schemes and eligibility pathways, the application process can be complex. 

The Employer Nomination Scheme (ENS) enables an Australian business to sponsor an individual to fill a full-time, permanent position within their organisation. The Regional Sponsored Migration Scheme (RSMS) has the same purpose, but applies to individuals nominated for positions in regional Australia.

As well as health, character, language and age requirements, applicants under the ENS/RSMS need to satisfy the criteria for one of three eligibility pathways:
  1. The Temporary Residence Transition stream (TRTS), where the applicant has worked with the sponsoring employer for at least two years in their nominated occupation whilst holding a 457 visa.
  2. The Direct Entry stream (DES), where the applicant has obtained a positive skills assessment in the nominated occupation and can provide evidence of at least three years' relevant experience in that occupation.
  3. The Agreement stream, where the applicant is nominated by an employer through a labour agreement.

Each stream comes with its own pluses and minuses. With this mind, here are five tips to avoid the common pitfalls that can affect the outcome for employers and employees looking at sponsored permanent residence.

TIP 1: Only Australian companies can nominate under the ENS/RSMS

An overseas company may be approved to sponsor 457 visa holders to fulfil contractual obligations or establish a business operation in Australia. However, such overseas businesses cannot nominate under ENS/RSMS as they may not be considered to be actively ‘operating a business in Australia’.
Tip 2: Consider any corporate restructures or changes in role

Any changes to the structure or legal status of the entity in which the 457 visa holder has worked or changes in roles within the claimed two year employment period could mean that the employment cannot be counted towards the TRTS period, and the two years are re-set. 

Tip 3 - Have you selected the correct entity to nominate?

Under the DES, the nominator must be the ‘direct employer’ of the applicant. However, the TRTS allows for the nomination of positions located within an ‘associated entity’, although the 457 visa sponsor must act as the nominator. 

Tip 4 - Have you correctly calculated the ‘earnings’?

Specific exemptions to English, skills and age criteria are available under both streams based upon the ‘earnings’ for the nominated role. It is essential not to miscalculate this amount, noting that earnings are comprised of: 
  • wages
  • amounts that the employee has directed the employer to pay
  • the value of agreed non-monetary benefits.

But not:
  • payments of amounts which cannot be determined in advance (such as performance based commissions and bonuses)
  • reimbursements
  • compulsory contributions to superannuation.

Tip 5 - Different training criteria applies across the streams

If a nominator cannot demonstrate that they have maintained the relevant level of training expenditure throughout the validity of their standard business sponsorship, they cannot satisfy the requirements of the TRT stream. In these cases, the nominator may need to consider using the DES, where the training benchmark only needs to be met in the previous 12 months.

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